- Oil prices fell as US and Iran consider reviving talks amid a new US Strait of Hormuz blockade
- Iran may pause shipments through the Strait to avoid testing the US blockade and aid talks
- US-sanctioned China-linked tanker appeared to test the new US restrictions in the Strait
Oil fell on signs Washington and Tehran may revive talks following the start of a US blockade of the Strait of Hormuz, with traders tracking a China-linked vessel that seemed to U-turn before testing the new curbs.
Brent edged lower to around $97 a barrel, while West Texas Intermediate was near $95. Iran is considering a short-term pause to its shipments through the Strait of Hormuz to avoid testing a US blockade and scuppering a fresh round of peace talks, according to a person familiar with Tehran's deliberations.
The two sides are in discussions on holding another round of face-to-face negotiations for a longer-term ceasefire, according to people familiar with the matter. The goal is to arrange them before the expiration of a two-week pause in hostilities that was announced April 7, they said. Reuters reported that negotiating teams could return to Pakistan this week.
Meanwhile, the International Energy Agency warned the conflict is set to wipe out oil demand growth this year, resulting in the first annual decline since the pandemic. The head of the body said Monday that prices aren't yet reflecting the unprecedented scale of the crisis.
The war has seen energy infrastructure hit and Iran choke off traffic through the Strait of Hormuz, triggering a supply shock. On Monday, the US raised the stakes with its own blockade of vessels heading for or leaving Iran's Persian Gulf ports or coastal areas.
A US-sanctioned tanker linked to China appeared to U-turn after making its way through the strait in a test of the new US stance, tracking data showed. It's unclear if it has visited Iranian ports or is carrying cargo.
Still, Saudi Arabia is pressing the US to drop the blockade of the strait and return to the negotiating table, the Wall Street Journal reported, citing unidentified Arab officials. The pushback comes amid concern Trump's move could lead Iran to disrupt other important shipping routes, the report said.
"It remains difficult to assess what is true and what is not," said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management. "The reality is that the market is listening to Trump and buying into the narrative that the war will soon be over."
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Both gasoline and diesel retail costs in the US rose to the highest levels since 2022 earlier this month. Meanwhile, jet fuel and diesel prices in Europe have soared to all-time or near-record highs above $200 a barrel.
Acknowledging the pain for US consumers caused by spiking gasoline prices, Vice President JD Vance - who led the US delegation in unsuccessful talks with Iran last weekend in Pakistan - said the blockade imposed on Tehran's oil increased US leverage for negotiations.
"I do think that we're in a place where we've accomplished our objectives," Vance told Fox News. "We can start to wind this thing down."
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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